My kids bank at the The Bank of Dad, meaning I serve as their banker and ATM. They deposit their allowance or other earnings, as desired, I provide safe storage and interest (which they understand), and dispense cash as requested. Except for the interest part, it’s just like a real savings account. It’s all done with a simple spreadsheet.
As of yesterday, my youngest child owed my wife $12.50 for an extension of credit for an earlier transaction. We provide instant credit for our kids at stores, with credit limits up to the value of their savings accounts, which we can access on our phones. It’s just like a real credit card, only involving less plastic.
Last night, my child cleared her debt. End-to-end, the transactions looked like this:
- Credit extended to child in the amount of $12.50.
- $12.50 spent by my wife.
- Child requested and received $12.50 in cash from her savings account, the balance of which was reduced accordingly.
- The actual cash/change came from my wallet and change jar, and handed to my child.
- Child hands wife $12.50.
- Wife hands $12.50 to me.
- I put cash and change back from whence it came.
It’s an amusing number of transactions that’s functionally equivalent to changing a few digits in a spreadsheet. Most of the rest is pedagogy, which is the real source of value.